The Analyst

The Thesis

According to Matteis, Epidiolex is such a potential money maker that GW’s story will come down to execution and access.

Matteis expects a strong launch for Epidiolex, he predicted an 80 percent chance of success for the drug in Tuberous Sclerosis complex and he said extension of GW's intellectual property over time could all drive upside in the stock.

He said Stifel's survey of physicians indicates a high level of awareness about the drug, which is a good sign of potentially high penetration rates. In the near-term, Matteis expects Epidiolex to receive nonrestrictive Schedule IV classification from the Drug Enforcement Agency.

Earlier this week, GW Pharma said Epidiolex would cost about $32,500 per year.

"The figure is on the lower end of what analysts projected the drug would cost back in 2016, when they estimated it would range from between $30,000 to $60,000 per year," according to Business Insider.

Consensus expectations are for $115 million in Epidiolex sales in 2019, and Matteis said that number seems reasonable given there are already 1,200 patients using the drug via compassionate use.

Longer-term, Matteis said additional indications and improvements to reimbursement and access will drive Epidiolex sales to around $1.5 billion by 2023.